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# Given production function: y=f(x1,x2)=(α⋅x(σ−1)/σ1+(1−α)⋅x(σ−1)/σ2)σ/(σ−1) consider,   α = 0.2 and σ = 0.7. The first factor is...

## Question

###### Given production function: y=f(x1,x2)=(α⋅x(σ−1)/σ1+(1−α)⋅x(σ−1)/σ2)σ/(σ−1) consider,   α = 0.2 and σ = 0.7. The first factor is...

Given production function: y=f(x1,x2)=(α⋅x(σ−1)/σ1+(1−α)⋅x(σ−1)/σ2)σ/(σ−1)

consider,   α = 0.2 and σ = 0.7.

The first factor is currently used in the amount x1 = 9, and the second factor is used in the amount x2 = 3.

a) When (x1,x2) = (9,3), how much output is being produced?

Output:

b) When (x1,x2) = (9,3), what is the marginal product of factor 1?

Marginal product:

c) When (x1,x2) = (9,3), what is the average product of factor 1?

Average product:

d) When (x1,x2) = (9,3), what is the rate of technical substitution (a positive number)?

Rate of technical substitution:

e) When (x1,x2) = (9,3), what is the elasticity of substitution (a positive number)?

Elasticity of substitution:

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